The gold price remains stable today after sizeable gains last Friday due to the government shutdown in the US but the volatility is expected to pick up later today in the American session when the senate votes on a measure to end the government closure.
The Senate will hold the vote to reopen the government by providing 3 weeks of funding and its far from clear whether the republicans will have the numbers to pass the measure as many democrats are likely to vote no.
A no vote is likely to boost the gold price further as investors exit the US dollar in search of safe haven assets.
“We are getting into a silly season in America, where we could be having a government shutdown, which will hurt the U.S. dollar and support gold,” Bart Melek, head of global strategy at TD Securities.
Gold is also likely to receive a boost over the coming months at the expense of bitcoin, which has tumbled about 40 percent in price over the last month which has left investors questioning the long term viability of the speculative currency.
Gold dealers reported a surge in gold bullion and coin purchases last week as investors who are not used to such volatility that happened so suddenly, cashed out of bitcoin and other crypto currencies
"Gold has a sustainable track record over decades and is an asset you actually hold in your hands. People are looking for something to touch rather than an investment where only the belief in it is the value," he said. "Bitcoin has proven one time more than it is based on speculation."